The Auction Advantage
Seller's Benefits
Auctions bring buyers and sellers together in a real estate transaction that is determined on a fixed date and predetermined price. From the time the decision to market the property through the auction process till the successful bid is taken usually can be completed within 60 to 90 days. The seller has control over time, place and price depending upon the auction type (See Below).
Real Estate Auctions will create the fair market value of your property by bringing together qualified buyers in a competitive atmosphere. All bidders are generally pre-registered and required to have a certified check to cover the deposit. There is no negotiating the final price, the last bid is an absolute commitment to purchase. The property condition is outlined in the bidder’s package, thus eliminating any contingencies and inspections during closing. Real Estate Auctions ease the pain of selling your property as compared to your typical real estate transaction.
Property Auction Types
Absolute Auction- (No Reserve Auction) is an auction with no minimum bid amount. The highest bidder will purchase the property no matter the high bid price. This type of auction is designed to attract the maximum participation from the buying public as the seller has committed to convey their property to the highest bidder.
Auctions with Reserve- There is a minimum bid or reserve price if the bidding does not reach the minimum, there is no sale. Seller reserves the right to decline final bid, which lessens seller’s risk. This method also has a tendency to reduce buyer interest for those who are bargain hunting.
Buyer’s Benefits
Landowners forgo the traditional real estate transaction and opt for the auction sale for a variety of circumstances, including the desire to ease the selling process or unfortunate family matters. Most likely bidders include local residents familiar with area real estate values. Therefore, an out of state sportsman will be assured the fair market value or greater at the time of auction.
Another benefit to buyers is the long -term profit opportunity in land investment. In today’s erratic financial markets (see Advantages of Real Estate), land is a comfortable asset, one that you can enjoy while increasing your net worth.
Participating in an auction is fun and exciting, as well. Buyers have control over their own maximum price level and can stick by it with no harassment from real estate agents. Auctions are generally based on ten percent down at close of auction with balance due approximately in thirty days. There are neither timely credit checks nor a lot of repetitive paper work. You never pay more than what you think the property is worth. There is no negotiating on terms and conditions, amenities are determined prior to auction. If you are familiar and content with the property then bidding from the comfort of your home hundreds of miles away is another major benefit.